The Official Blog Of Edward Cline

The Guardian of Every Other Right: Part V

“Intellectual freedom cannot
exist without political freedom; political freedom cannot exist without
economic freedom; a free mind and a free market are corollaries.” – Ayn Rand, 1963*
Chapter
7 of James Ely’s book, “The New Deal and the Demise of Property-Conscious
Constitutionalism,” chronicles the Supreme Court’s timid retreat from a
semi-efficacious defense of property rights, unsure of the propriety of
property rights unless linked to the “public good,” browbeaten by
“public opinion,” and savaged by the Progressives.
The new political outlook emphatically
rejected the laissez-faire philosophy. Justice Louis D. Brandeis expressed this
reform sentiment when he declared in 1932, “There must be power in the
States and the Nation to remould, through experimentation,
our economic practices and institutions to meet changing social and economic
needs.” (Italics mine; p. 125)
“Experimentation”
meaning that Progressivism was basically a John Dewey-esque program of applied political
and economic Pragmatism.  While
“constitutionalism” relied  on
a strict interpretation of the Framers’ principled meanings – an
“ideology” regarded with hostility by Progressives and others of a
collectivist stripe – Progressivism is an ideology empty of any principles
except a desire and commitment to control, rule, and “harmonize” the
whole country and make it fit into an authoritarian straightjacket. If a new”
sin” tax or regulation of manufacturing or a new levy on corporate profits
doesn’t work here, maybe it’ll work over there, and if it doesn’t, we can try
something else. Never mind the inconvenience to property owners and the
dislocation of market forces the experiment produces. You can’t achieve an
omelet of “social equity” without breaking some eggs. Or some heads.
Theories and principles and definitions just get in the way.
Borrowing from the Progressive
legacy, President Roosevelt’s New Deal program was grounded on the notion that
government had an affirmative duty to promote the general social
welfare….Congress and the states enacted an extraordinary array of measures
that greatly enlarged governmental supervision of the economy and sought to
redistribute wealth and economic power. This social welfare approach flatly
contradicted the insistence on limited governmental activity, marketplace
competition, and respect for property rights that were at the heart of traditional constitutionalism. (Italics mine; p. 125)
I
emphasized “traditional” because a tradition is simply an old
practice or “habit” to acknowledge something that might have been
good and “worked” – as freedom has “worked” or proven its
value. But if one’s enemies snort at and wish to discard “tradition” because
it’s “old” and replace it with a haphazard, “let’s see if this
works” non-value, with submission to government authority, and with the
populist “will of the people,” a situation has been reached when the
defenders of freedom should restate, renew,
and perhaps even rediscover the
founding principles which they beforehand only blindly revered. This the Court
largely did not do.
Progressivism,
on the other hand, is reminiscent of a comedian’s holding down one social or
economic “ill,” only to cause one or more other “ills” to pop
up elsewhere. The “ills” multiply exponentially every time he attempts
to hold anyone of them down, and the comedic Progressives concoct more
solutions to the “ills” they themselves have caused. Think “The
Three Stooges,” only what Progressivism has done to the country is no
laughing matter.
Ely
writes that the composition of the Court was almost evenly divided between
justices who were hostile to the New Deal, those who were merely uneasy with it,
and those who were committed Progressives:
The Supreme Court’s stubborn
defense of entrepreneurial values precipitated a constitutional crisis.
Ultimately, under great political pressure and President Roosevelt’s threat to
pack the Court, several justices shifted their position and accommodated the
New Deal’s economic and social program. As a result of the constitutional
revolution of 1937, the Court abandoned its historic role as a protector of
individual property rights and permitted the federal government and the states
to play a major role in directing American economic life. Thereafter, the Court
relegated property rights to a secondary position and largely turned its
attention to other matters. (p. 126)
For
example, Ely cites a case involving mortgages and the quasi-theft or “taking”
of property:
At issue in the leading case of Home Building and Loan Association v. Blaisdell
(1934) was a Minnesota act imposing a limited moratorium on the foreclosure
of farm mortgages. Designed to safeguard the ownership of homes and farms, the
statute temporarily suspended the mortgage obligation while allowing the
mortgagor to remain in possession of the payment of a reasonable rent. The
mortgage moratorium was similar to the debtor-relief laws often declared
unconstitutional in the nineteenth century as an impairment of the obligation
of contract.
By a five-to-four margin, the
Supreme Court held that the moratorium did not violate the contract clause.
Clearly influenced by the economic emergency, Chief Justice Charles Evans
Hughes ruled that contracts were subject to the reasonable exercise of state
police power….He weighed the contractual rights of the parties against the
public-interest arguments of the state to determine whether the infringement of
the mortgage contract was reasonable. (pp. 126-127)
Ely
highlights the Court’s continuing downward fall from principles to wistful
pragmatism:
The Supreme Court also approved
federal regulation of agricultural production [a field the Court had previously
conceded was the states’ exclusive realm of control]. New Dealers hoped to
increase crop prices by restricting the supply. In Munford v. Smith (1939) the justices affirmed the second
Agricultural Adjustment Act, which provided for the imposition of marketing
quotas on farmers to reduce the volume of crops. The Court went a step further
in Wickard v. Filburn (1942) and
upheld federal power to set quotas for wheat consumed by a farmer for livestock
feed and household food on his own land. Justice Robert H. Jackson, writing for
the Court, defined congressional authority under the commerce clause in
sweeping terms, rejecting the distinction between direct and indirect effect on
interstate commerce. Jackson reasoned that the cumulative effect of consumption
of a small amount of homegrown wheat by many farmers could have a substantial
influence on the market price of wheat.
For all practical purposes, the
Supreme Court recognized an unqualified power in Congress to reach any economic
activity under the commerce clause. Indeed, the justices stated in 1946 that
federal commerce power was “as broad as the economic needs of the
nation.” (Brackets mine; p. 136)
It
is obvious that it never occurred to the justices to ask themselves whether the
solution to answering the nation’s “needs” was to get the government
out of the economy, where the Framers never intended it to be. 
In
more instances than can be repeated here, Ely records the “progress”
of the Court to becoming a virtual befuddled handmaiden of Progressivism under
the New Deal. The Court had resorted to what can only be characterized as
Constitutional bean-counting. “These beans are permissible, those others,
not. And those over there might not be beans at all, but we’re not sure. We’ll
err on the side of caution. We don’t want the president and the populace getting
mad at us again.”
Ely
chronicles the succession of taxes and controls imposed by Congress:
In the Emergency Price Control
Act of 1942, Congress conferred extensive powers on the Office of Price
Administration to fix prices of commodities “which will be generally fair
and equitable.”….
…[T]he Court…[in 1944] affirmed
the act’s rent control provisions, rejecting the contention that such controls
amounted to a taking of property….
Another New Deal innovation was
the use of federal taxing power for social welfare purposes. The Social
Security Act of 1935 imposed a special tax on employers and employees for the
payment of benefits to the aged…Adopting a liberal view of the taxing power,
the Supreme Court in Helvering vs. Davis
(1937) expansively ruled that Congress could spend money for the general
welfare….In effect, the Court sanctioned a comprehensive power in Congress to
levy taxes for any purposes that were thought to benefit the public….
Once the Supreme Court accepted
the New Deal, the justices abruptly withdrew from the field of economic
regulation. This reflected a monumental change in the Court’s attitude toward
property rights and entrepreneurial liberty. (Brackets mine; pp. 138-139)
Ely
emphasizes that the “cornerstone of this new constitutional direction was
a judicially created dichotomy between property rights and personal
liberties.” He quotes James L. Oakes in his 1953 Washington Law Review article, that, as far as the Court was
concerned, “property rights were essentially confined to a legal dust
bin.”
Ely’s
last chapter, “Property Rights and the Regulatory State” is not so
much a discussion of the timorous, muted revival in the Court of a concern for
property rights as it is a sketch of a vanquished nation, vanquished by its own
government and the highest court in the land.
Businesses adjusted to the
regulatory régime and prospered. Although sharp differences remained concerning
the precise role of the government in managing the economy and controlling the
usage of private property, few urged a return to a largely unregulated free
market before the New Deal. The dominant political ideology supported the
regulatory state and looked for a government solution to economic ills….The
federal and state governments mushroomed steadily in size and played a large
role in nearly every aspect of the economy. As the network of economic
regulations grew more intrusive, there was an erosion of individual property
rights. Some commentators even suggested that the basic notion of private
property ownership had disintegrated. (p. 142)
In
truth, what was disintegrating was the epistemology and metaphysics of the
justices. Ely names another culprit on the Court:  
In the 1950s and 1960s, the
Supreme Court, under the leadership of Chief
Justice Earl Warren
[appointed by President Dwight D. Eisenhower], embraced
the jurisprudence of substantive liberalism. Striving to achieve egalitarian
goals, the justices sanctioned the growing welfare state and consistently
deferred to legislative bodies with respect to economic and social issues….In
this climate, the security of property and contractual rights, long a primary
function of the federal judiciary, received scant attention. Heavily influence
by New Deal constitutionalism, the Court virtually eliminated property rights
from the constitutional agenda for several decades. (p. 143)
The
post-New Deal decision-making behavior of the Court vis-à-vis property rights protection can be likened to a man in a
semi-coma, babbling incoherently one moment, making semi-lucid observations the
next. Ely records some of the oscillating rulings of the Court. In regards to
the “takings” clause:
As discussed earlier, the Supreme
Court has long recognized that land use controls could have such a severe
economic impact as to represent a taking of the property. In practice, however,
the justices have been reluctant to invoke the doctrine of regulatory taking
and have allowed Congress and the states wide latitude to impose conditions on
the use of land. The Court has not established any formula for determining when
a restriction of property has gone too far, preferring instead to rely on an ad
hoc, case-by-case inquiry. Nonetheless, the justices have repeatedly declared
that regulations are not unconstitutional simply because they prevent the best
use of land or dramatically diminish its value to the owner. (p. 160)
Ely
cites one notable instance of this policy:
The Court has allowed cities to
enact land use regulations that enhance the aesthetic features of municipal
life. In Penn Central Transportation v.
New York
(1978), the Court by a six-to-three vote, sustained the
designation of Grand Central Terminal [now
privately owned
] as a historic landmark, even though such an action
prevented the landowner from modifying the building in any manner without
municipal permission, thereby causing a drastic reduction in its value. Justice
William Brennan, speaking for the Court, stressed that the landowner could use
the terminal for its original purpose and was able to earn a reasonable return
on its investment….But the factors, such as “distinct investment-backed
expectations,” and the “character of the government action” are
hazy, and there is no indication of how much weight should be assigned to each
factor. The result is a fact-bound and murky test heavily loaded in favor of
governmental regulation. In dissent, Justice [William] Rehnquist argued that a
taking had occurred and that the costs of a historic preservation program
should be borne by taxpayers generally,
not individual landowners. (Brackets and Italics
mine; p. 160)
One
could also argue that the one “taking” created another
“taking”: The taking of tax dollars “generally” to assist
the property owner in complying with the terms of the taking of his property
for “historic preservation” purposes. One supposes that Justice
Rehnquist overlooked that angle. But then, the Court had already sanctioned a
medley of takings for the “general welfare” and “public benefit”
reasons, so that aspect of the Grand Central Terminal case naturally would not
have occurred to him.
In
another land use case, Agins v. City of
Tiburon
(1980), Ely reports that the Court sided with the municipality and
its zoning restriction of construction on five acres by a developer of
single-family homes.
The Supreme Court rejected the
argument that the enactment of the ordinance constituted a taking or property.
Writing for the Court, Justice [Lewis F.] Powell noted that the application of
zoning laws effected a taking only “if the ordinance does not
substantially advance legitimate state interests…or denies an owner
economically viable use of his land.” He found that the Tiburon ordinance
served a legitimate function by preserving open space and enduring the orderly
development of residential property. (Brackets mine; p. 161)
Ely
introduces the reader to a new kind of “property” the Court was
willing to consider, one that is so bizarre and irrational that one can hardly
credit the justices with any kind of moral standing: Welfare and entitlements.
In Goldberg v. Kelly (1970) the justices, by a vote of five to four,
edged towards acceptance of the new property concept. They held that New York violated
due process procedural guarantees by terminating welfare benefits without a
prior hearing. Ultimately, however, the Supreme Court declined to treat most
entitlements under government programs as traditional property rights for the purpose
of due process. Instead, the Court viewed government benefits as merely
statutory creations and preserved in large measure of legislative authority to
manage and even eliminate benefit schemes….
Justice Brennan, a persistent
critic of extending constitutional protection to traditional economic
interests, was a leader in the move to recognize entitlements and public
employment as forms of property. Brennan thus refurbished the conservative
doctrine that respect for property rights secured political freedom to serve
egalitarian ends. The conservative justices, on the other hand, rejected the
new property theory, adopting the liberal approach that the courts should defer
to state control of economic matters. The result of this development was that government
benefits were accorded some procedural safeguards but never received the same
protection as traditional property rights. (p. 170)
One
is at a loss to classify such thinking as schizophrenia, or as evidence of a
split personality disorder.
In
his short Epilogue, James Ely sounds a dour, pessimistic note about the future
of property rights in the context of today’s political climate, especially (from
my own perspective) given the abusive, arrogant, wholly Progressive (some would
say Marxist) character of the current administration.
…[T]he facile suggestion in many
judicial opinions after 1937 that economic questions should be left entirely to
the political process is also troubling. If individuals or enterprises have
only those property rights that legislators choose to recognize, then property ownership
is simply a matter of legislative sufferance. No other important rights are treated in such a cavalier fashion….Much
legislation frankly seeks to achieve a wider distribution of wealth by
divesting owners of their right to use property to its maximum advantage and by
altering contractual arrangements. Such opportunistic behavior is less painful
to lawmakers than levying taxes to finance government programs. (Italics mine; p. 174)
On
the contrary, other rights, those to be found in the Bill of Rights, are or
have been treated in worse than a “cavalier fashion,” from gun
ownership, to the right to assembly (or association), to freedom of speech vis-à-vis criticizing Islam and campaign
finance law restrictions. The “regulatory state” knows no limits on
its appetite for power. No right today is sacrosanct or beyond the government’s
wish to curtail or abolish.
Only
just recently, Senate Majority Leader Harry Reid (D-NV), in the wake of his
defeat at the Cliven Bundy Ranch in Nevada, introduced a bill to abridge
political speech. Breitbart’s
Big Government
reported on May 18th:
On May
15, Senate Majority Leader Harry Reid (D-NV) announced the Senate Judiciary
Committee will hold a hearing on June 3 on amending the U.S. Constitution to
limit political speech. If ultimately adopted, it would mark the first time in
American history that a constitutional amendment rescinded a freedom listed as
among the fundamental rights of the American people.
The proposed amendment was
introduced by Sen. Tom Udall (D-CO) as S.J.R.
19
 and if ratified would become the Twenty-Eighth Amendment. It
provides in part that “Congress shall have power to regulate the raising and
spending of money and in-kind equivalents with respect [to] the Federal
elections … [and] State elections.” The proposed amendment includes a provision
that “Nothing in this article shall be construed to grant Congress the power to
abridge the freedom of the press.” So Breitbart News, The New York
Times
, and the mainstream media would be able to say whatever they want,
but citizens and citizen groups such as the National Rifle Association could
not.
Ely
seems to agree with me when he ends his book:
The future path of the Court is
difficult to predict. A return to a vigorous property-conscious
constitutionalism, however, appears highly problematic. Despite renewed
interest in the rights of property owners, it would require a sea change in the
legal culture before property rights are accorded the same level of protection as
other individual rights. In the last analysis, the viability of property
rights, perhaps like all other individual rights, rests on a broad popular acceptance. The courts will continue to strike a balance between popular democracy
and private property ownership
. (Italics
mine; pp. 174-175)
Again,
on the contrary, a recognition of individual rights does not rest “on a
broad popular acceptance” of them, but on the integrity and perspicuity of
justices. No balance “between popular democracy (the Framers founded a republic, not a democracy, which they abhorred) is possible.” Mob rule does
not establish the validity of individual rights. 

The problem can be solved when
the justices recognize, as Ayn Rand recognized, that “intellectual freedom
cannot exist without political freedom; political freedom cannot exist without
economic freedom; a free mind and a free market are corollaries.”

The
Guardian of Every Other Right: A Constitutional History of Property Rights
, by James W. Ely, Jr .. New
York: Oxford University Press, 2007. 216 pp.
*From
“For the New Intellectual,” in For
the New Intellectual
: The Philosophy of Ayn Rand
, by Ayn Rand. New
York: Signet, 1963. 224 pp.

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1 Comment

  1. Jim

    Great work as usual. Thanks much.

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